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Obama and G.O.P. Facing Opposition to Trade Pacts

Senator Harry Reid of Nevada said he did not support trade-promotion authority for the Obama administration. On Tuesday, President Obama pushed for two trade deals in his State of the Union address.

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Gabriella Demczuk/The New York Times

WASHINGTON — For companies like General Electric and Honeywell, it would help open untapped global markets, lift exports and create middle-class American jobs. For labor groups like the A.F.L.-C.I.O. and the Teamsters, it is a threat to American workers, bound to lead to lost jobs and lower wages, as well as rising corporate profits.

At issue is the so-called fast-track trade approval, a green light from Congress for the Obama administration to complete two sweeping trade deals, one with Pacific Rim countries and the other with Europe.

President Obama, supported by many Republicans and business groups, has asked for fast-track approval to ease the eventual passage of his trade deals, which he argues would provide a shot in the arm for the economy.

But he has run into staunch opposition from members of his own party, as well as labor and environmental groups. They fear a further loss of jobs to the forces of globalization and technological change and inadequate protections against environmental damage.

In the past, trade deals often faced congressional opposition and long parliamentary delays, but eventually they almost inevitably won approval. This time, Mr. Obama appears to be losing the argument. And without fast track, which ensures that lawmakers cannot make changes to either deal, foreign trading partners might hesitate to agree to American demands.

This week, Senator Harry Reid of Nevada, the majority leader, came out against fast track, also known as trade-promotion authority, just a day after Mr. Obama had pushed for the two trade deals in his State of the Union address.

“I’m against fast track,” Mr. Reid told reporters on Wednesday. “Everyone would be well advised just to not push this right now.”

Mr. Reid’s comments suggested that the Senate might not even take up fast-track legislation in the near term — let alone pass it — complicating the administration’s continuing negotiations with foreign leaders.

In July, the United States and the European Union opened trade talks, which are still considered to be in the preliminary stages. In December, Washington and 11 other Pacific Rim nations ended a round of talks on a sweeping trade deal aimed not only at reducing tariffs and trade barriers but also providing other benefits sought by some businesses. Officials involved in the talks said they would resume this year.

The White House said that the administration was aware of Mr. Reid’s position and that it would continue to campaign for fast-track authority and the two trade deals more generally.

“Leader Reid has always been clear on his position on this particular issue,” said Jay Carney, Mr. Obama’s press secretary. The president, he said, “will continue to work to enact bipartisan trade-promotion authority.”

The United States trade representative, Michael Froman, said the administration remained confident it could negotiate a comprehensive deal that would bolster the American economy — and win over skeptics.

“We have made clear that we’re committed to negotiating a high-standard, ambitious comprehensive deal,” Mr. Froman said in an interview. “If we can achieve that with our trading partners, we’ll be able to sell it to the American public and to Congress.”

But Mr. Reid’s comments cast serious doubt on the administration’s push. It also led to a sharp backlash from Republicans, who generally support such trade deals and see an opportunity to capitalize on the election-year rift among Democrats.

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House Republican leaders kicked off their annual retreat, at a Chesapeake Bay resort, by highlighting the divide between the president and the Senate majority leader. “Is the president going to stand up and lead on this issue?” asked House Speaker John A. Boehner of Ohio.

Representative Kevin McCarthy of California, the No. 3 House Republican leader, added: “The president said he has a phone in his hand. The first call he should make is to Harry Reid to talk about trade.”

At the heart of the disagreement among Democrats is the effect of trade liberalization on jobs.

Mr. Obama and many moderate Democrats, supported by business leaders and many economists, argue that the deals would lift exports and help create more valuable jobs in manufacturing and services, even if some other jobs were lost to cheaper foreign producers.

The authority “is critical to completing new trade agreements that have the potential to unleash U.S. economic growth and investment,” Randall L. Stephenson, the chairman of AT&T and leader of the Business Roundtable, a major lobbying group, said in a statement.

But many Democrats, joined by some economists, fear that any new trade deals, whatever their overall benefit to the economy, are likely to exacerbate the income inequality that Mr. Obama has made the banner economic issue of his remaining years in office.

“Trade should be making industries more productive,” said David Rosnick of the Center for Economic and Policy Research, a left-leaning research group in Washington. “But there’s a lot of literature indicating that trade-deepening increases inequality.” Ultimately, he said, the Pacific Rim trade deal might mean “lower wages for most workers.”

Jason Furman, chairman of the president’s Council of Economic Advisers, agreed that globalization and technological change had eroded American jobs. “That’s a fact,” he said. But, he added, that does not mean the country should be backing away from the global economy.

“The question is what are your policies doing,” Mr. Furman said, adding that the whole point of the Pacific Rim trade deal “is not just to sit back and passively accept globalization, including the challenges it poses, but to try to reshape it and move it in a positive direction.”

He said the United States might become less competitive globally if it disengaged from seeking further trade openings. “If you’re not in an agreement — that trade will be diverted from us to someone else — we will lose out to another country,” Mr. Furman said.

Labor and environmental groups, joined by numerous progressive lawmakers, have not been swayed by such arguments. “We’re going to have a very vigorous grass-roots campaign,” said Bill Samuel, the A.F.L.-C.I.O.’s legislative director. “It will create some jobs, but we will lose far more jobs.”

Referring to the arguments by proponents of the two pacts, he added, “It always turns out to be far worse than they predict.”

Trade deals have never been politically popular, and an increasingly populist Congress, on both sides of the aisle, is reflecting that sentiment.

“The Senate has changed,” said Senator Sherrod Brown, Democrat of Ohio. “The country has always been ahead of Congress on trade agreements. The country has never wanted these very much.”

Jonathan Weisman contributed reporting from Cambridge, Md., and Steven Greenhouse from New York.

A version of this article appears in print on January 31, 2014, on Page B1 of the New York edition with the headline: Obama and G.O.P. Facing Opposition to Trade Pacts. Order Reprints|Today's Paper|Subscribe